Morning Wrap: ASX 200 to tumble, S&P 500 and Nasdaq record worst session since 2020

ASX 200 futures are down 93pts (-1.19%) as of 8:30 am AEDT.

In a nutshell:

• US stocks experienced their worst session since the pandemic selloff

• There was no dip buying in sight, with major benchmarks trending lower throughout the session to close at worst levels

• China, the EU and Canada vow immediate retaliation, Albanese rules out reciprocal move

Let's dive in.

S&P 500 SESSION CHART

S&P 500 gaps down sharply, trends lower to close at worst levels (Source: TradingView)

OVERNIGHT MARKETS

• US markets closed sharply lower, with the S&P 500 and Nasdaq recording their worst sessions since March 2020

• Russell 2000 entered bear market territory, down 21.5% from its 25-Nov-24 record high

• Zero dip buying in sight – S&P 500 opened 3.14% lower and finished at worst levels, down 4.84%

• Broad risk-off day as investors continued to digest yesterday’s ‘Liberation Day’ tariff announcements

• Retaliation threats drove further fear, with China pledging a response if tariffs aren’t removed and Canada calling for tariffs on US auto imports

• Oil prices down more than 5% after OPEC output acceleration and global demand concerns (AX) 

• Strategists divided, with some flagging economic slowdown while others view tariffs as potential buying opportunity (BBG)

• Bank stocks headed for worst daily performance since the regional banking crisis (BBG)

STOCKS

• Wall Street urges companies to temper IPO valuations for better chance of successful deal amid spike in market volatility (BBG)

• Stellantis to furlough 900 workers in US factories, temporarily shut production in Canada and Mexico (FT)

• Whirlpool lays off 651 from Iowa, cites weaker consumer demand (DMR)

• Lululemon shares tumble, company sources ~40% of its products from Vietnam, which has been hit with a 46% tariff (CNBC)

• Nike shares down 14% as roughly half of its footwear products are manufactured in China and Vietnam (CNBC)

• Discount retailers like Five Below and Dollar Tree down 10-25% as both companies are big sellers of imported goods with tight margins (CNBC)

RECIPROCAL TARIFFS

• China urges US to immediately lift tariffs, vows retaliation (RT)

• Mexico's Economy Minister will travel to Washington next week to continue talks with the US, aiming to reduce tariffs on materials and autos (BBG)

• Secretary Lutnick says Trump will not back down on tariffs (CNN)

• Canada and Mexico exempt from reciprocal tariffs due to existing duties (RT)

• Apple could see 9% hit to gross margins as tariffs range from 20-54% in countries including India, Vietnam and Malaysia, where the company produces iPhones and other products (BBG)

• Volkswagen to introduce an "import fee" on cars affected by 25% autos tariff (RT)

• Steel, aluminum, gold excluded from reciprocal tariffs, more exemptions could expected to be detailed later (BBG)

• Canada PM says they will fight the US with "force" and "countermeasures" (CBC)

• EU vows retaliation as Trump slams 20% tariffs on European goods (FT)

• France is pushing EU to target US tech companies, which would expand the trade war to the services sector (BBG)

• Australia says US tariffs 'not act of a friend' but rules out reciprocal move (RT)

ECONOMY

• US March ISM Services printed 50.8 vs. 53.0 consensus, participate feedback flagged a slowdown in new equipment purchases and new orders (RT)

• China's services activity rises to three-month high but staffing levels decline at quickest pace in nearly a year (RT)

• Eurozone PMI at seven-month high in March, sees only modest growth (RT)

ASX TODAY

• Company announcements typically fall during periods of extreme market volatility, as dealmaking slows, forecasts become uncertain, and smaller companies/explorers may choose to without announcements

• Amotiv guides to "marginal" revenue growth for FY25 compared to prior guidance for "growth", does not expect US tariffs to have a material impact on FY25 earnings (AOV)

WHAT TO WATCH TODAY

• Thursday's strength was a blip: The market appeared relatively upbeat yesterday (all things considered), with the ASX 200 closing 0.94% lower despite opening down 2.10%. Several large cap names managed to rally from a gap down to close in positive territory, including Pro Medicus, Commonwealth Bank, CSL and more. But given the ominous close overnight, it appears that local names are in for more pain.

• Energy selloff: Brent crude tumbled 4.6% overnight after OPEC unexpectedly agreed to advance their plan to phase out oil output cuts by increasing output by 411,000 barrels per day in May, according to Reuters. Energy was the worst performing sector on the S&P 500, down 7.5%.

• Staples strength: Woolworths and Coles both performed incredibly well on Thursday, up 1.9% and 2.1% respectively. Both stocks opened around breakeven and spent the whole day trending higher. The S&P 500 Staples sector was also the only sector to close higher overnight.

• Gold claws back early losses: Gold spot experienced a volatile overnight session, down 0.76% but sold off as much as 2.68% around midnight. Similarly, the Gold Miner ETF opened 4.0% lower but rallied back up to breakeven at close.

BROKER MOVES

• Block upgraded to Overweight from Equal-weight; target up to $67 from $65 (MS)

• Capricorn Metals upgraded to Buy from Neutral; target up to $9.90 from $7.70 (GS)

• Sims downgraded to Sell from Neutral; target cut to $12 from $14.80 (GS)

Stocks trading ex-dividend: 

• Fri 4 Apr: FFI Holdings (FFI) – $0.10

• Mon 7 Apr: Duxton Water (D2O) – $0.037, Gowing Bros (GOW) – $0.03, Shine Justice (SHJ) – $0.015

• Tue 8 Apr: Brickworks (BKW) – $0.25

• Wed 9 Apr: Clover Corporation (CLV) – $0.007

• Thu 10 Apr: Cadence Capital (CDM) – $0.03, Cadence Opportunities Fund (CDO) – $0.065, Cosol (COS) – $0.01

• Fri 11 Apr: WAM Leaders (WLE) – $0.047

Other ASX corporate actions today: 

• Dividends paid: A2 Milk (A2M), Atlas Arteria (ALX), AUB Group (AUB), Auckland International Airport (AIA), Corporate Travel Management (CTD), Coronado Global Resources (CRN), CTI Logistics (CLX), EarlyPay (EPY), Evolution Mining (EVN), Inghams Group (ING), Joyce Corp (JYC), Mader Group (MAD), Perpetual (PPT), Propel Funeral Partners (PFP), Reliance Worldwide Corp (RWC), Service Stream (SSM), SKS Technologies Group (SKS), Spark New Zealand (SPK), Supply Network (SNL), Tourism Holdings (THL), TPG Telecom (TPG), WOTSO Property (WOT)

• Listing: None 

• Earnings: None

• AGMs: None

Economic calendar (AEDT):

• 11:30 pm: Canada Unemployment Rate (MAR)

• 11:30 pm: US Non Farm Payrolls (MAR)

• 2:25 am: Fed Chair Powell Speech